The Economy: Think the Government Will Fix It By Phillip Reynes

The recession was long underway when the stock market crashed last September—it had been going on for nine months already as all who follow such things know. Yes September the month when the government nationalized Fannie Mae and Freddie Mac followed shortly by the investment house Merrill Lynch was forcibly merged into Bank America; the next day Lehman Brothers crashed and people like me cheered. This was quickly followed by the nationalization of AIG—the worlds largest insurance company—which unlike Lehman Brothers was considered “to big to fail.” Credit froze and orders for goods as well as investments halted, trade slowed dramatically, and unemployment started to soared. Yes the recession was here and fast looking like it might rival the great depression of the 1930's.

So far in this recession the US economy has lost more then 6.7 million jobs. Do the math and you'll see that comes to 11,600 jobs a day for nineteen months. As an anarchist my heart sang with joy for I know well that if it all comes down we will have a chance at building something better. I read with no small glee, as the Economic Policy Institute (EPI) stated that the whole made in the labor market was actually even bigger. They pointed out that to keep up with population growth the US economy needs to add about 127,000 jabs a month just to stay even. So over the nineteen months of this economic catastrophe that comes to an astounding 2.4 million more jobs. Now add that to the 6.7 million lost and you find we have 9.1 million fewer jobs then before this mess started. The EPI predicts that by the end of next year more then one in three workers (thats more then 50 million people) will have experienced either a spell of unemployment or underemployment!

This is an incredible opportunity for anarchist in America to make real headway in showing just how badly capitalism exploits the working man. One of the easiest ways is to just tell the truth and not let politicians on either the left or the right get away with spinning this into something other then what it is namely greed and exploitation of the worker. What follows here are some simple and verifiable facts so that you can call politicians and the uninformed on there dogma.

This economy and its collapse is founded upon events that took place starting as far back as Reagan—the star of Bed Time for Bonzo and oh ya a president. Reagan and his advisers accorded the finance industry a special status in our economy. It was Reagan who started the moves to make the movement of capital across state boundaries easier, he started the deregulation of finance and the removal of regulations separating commercial and investment banking. These are well known and indisputable facts.

Wall Street took full advantage of having a president who represented them over the people. From 1973 to 1985 the financial sector of the US economy never earned more then 16% of domestic corporate profits. In 1986 it reached 19% and by 1990 it had reached a high of 30%. In the last decade it reached 41%!! The fanatical industry is an industry that takes care of its own and you can see this in how they have paid themselves. From 1948 to 1982 pay for financial executives compared to other industries executives ranged between 99% and 108%. In the years from 1983 to 2007 it shot up and was 181% in 2007 making a financial executives earnings 81% higher then an equivalent executive in another industry.

Wealth brings power and as the financial sector became ever more wealthy they acquired more political power. We all hear the statements of people like Reagen “Whats good for Wall Street is good for America” (he didn't coin the phrase but he did say it on several occasions) and sadly the people on the street believed this crap. Bill Clinton was no better, as he was as much a corporate whore as Reagan in many ways. It was Lawrence Summers (Clinton's treasury secretary that said:”Financial markets don't just oil the wheels of economic growth; they are the wheels.”

Obama may in some small ways be better then Bush was but he is non the less as much a corporate whore as is bush or Reagan or Clinton. Since taking office Obama has given enormous sums of money—4.7 trillion and rising—in the form of bailouts of one sort or another to financial institutions. Yet only 800 billion to programs targeting the recession proper, i.e., putting people to work, green energy and the like.

The idea is flawed and goes like this. If the government provides money to banks banks will lend to consumers. The problem with this idea is that in the economy of the average worker incomes are flat and in many cases declining. This means that conditions can't improve. Thus, even though bank lending is down the profits and stock prices of many banks are back to where they were before the crash! Yes not only are many banks who received billions making as big a profit as ever they are paying huge bonuses to boot. We need to point this out as loudly and as often as we can.

Basically Obama has given out to much money with to few conditions to to many financial institutions on to favorable terms. He has given this out to the very people who did this to the economy, to the very ones who cased the crash. This has dampened the peoples trust and shaken the every day mans confidence and we need to shout this from the rooftops at every opportunity. The fact is bailouts not only did not loosen credit it never could have loosened credit for the simple reason that wages are flat or declining and citizens are in deep debt with little in the way of home equity to barrow upon.

Better yet, the failure of the bank bailout has made it harder for Obama to do a second stimulus package targeting jobs. Yes the 800 billion helped slow the free-fall but there is not much chance of there being another stimulus because Republicans are calling for a reduction in deficit spending. The fact is the economy can only continue to shrink in the foreseeable future because consumption can't go up. Wages as I said earlier are falling and households have lost six trillion in equity in the housing bubble and so there is nothing to spend.

State and local governments are going to have to cut budgets. Workers who have long been holding good jobs will be let go or laid off and may also default on mortgages. This is compounded by the fact that almost 24% of homeowners (where talking 16 million homes here) have home debt that in fact exceeds the value of there home—this is called being upside down. It is forecast that if property values continue to drop then by next year 48% of homes will be upside down.

Add to this lovely mix the deficit hawks. They want tax increases and entitlement cuts and if they get there way they will make life hell on earth for the working man who will not get help and be left high and dry while Wall Street gets even fatter. Could you ask for a better recruiting tool for Anarchists? It does not matter that durring the great depression these same fools got there way in 1937-38 and the result was more unemployment and greater hardship. Then we had a president with balls but there in no Roosevelt on the political horizon today. So the only way further unemployment rises can be stemmed is through more direct stimulus to the working class but the political right will fight it tooth and nail. They will say what about the deficit? What about the free markets? Keep government out of the job sector is what they will cry. The question of course is what about the working man but this is a question that they have not asked because fundamentally they do not care. They fail to see that the choice now is between running up the debt creating work or running up the debt because revenue in all areas of government collapses. The political right can't see this because there dogma trumps reality in all cases. But there is another path anarchy. We believe in community. We believe in the worker. We will be there as it all falls down.

I have poor grammar. But then I'm not a native english speaker and you are. I find it sad that you would chouse to focus only upon then and than and not upon ideals. Maybe you have a poverty of ideals? Or maybe for whatever reason the idea that anarchist could use the ecomomic crissis as a recruting tool seems a bad idea to you?

Regardless I want to see you write something in a language other then Enlish and then critique your grammar. It would be nice if the content of my ideas was what you had spoken to and not the words then and than.

I want to apologize to all who interpret my poor and I do mean poor choice of words as sexist. The title was insensitive and well to be frank wrongheaded and just plain bad. There is of course nothing wrong with taking it up the ass or any other way you choose to have sex. My point was the worker is being raped and that politicians on the left and the right are following dogmas that will not work or help. I wanted to illustrate some facts and point out that this mess can be exploited by us. My choice of words seems to obscure that and you all have my heartfelt apology.

I should have said rape of the American worker or some other similar phrase. I feel more then a little shame at the tittle I gave the article. It is amazing to me to find that I did not see at first brush how offensive the original tittle was and while it was not meant that way it does not excuse the fact that I did it.

Readers such as the one who accused me of being sexist have every right to be offended. Clearly, years of conditioning in a sexist society have left there mark on me. I will work harder on trying to be more aware of the mark that my own upbringing and life have left upon me and do better about not just being more conscious of it but in eradicating it.

To address the comments that you have made directly, i do have a few things to say. At first I was worried when you said that you were gleeful that people are unemployed, but later I understood you to mean that you were hopeful about the possibility for organizing. I trust that you don't actually enjoy it when working people are getting layed off.

However, I disagree with your analysis of the politics of the economy. With the economy the left-right democrat-republican dichotomy begins to break down. Remember that we had a republican president, George W. Bush, propose a massive bailout amounting to several trillion dollars, and it was supported mostly by democrats, not republicans. Republicans largely opposed it. Senator Obama also voted for the bailout that fall. Both partys merely play at opposition, and change their tune when in power. The bailout was a massive give-away with essentially no strings attached. Dozens of banks are refusing to cooperate even with the modest requirements after they have received the bailout, because there is no enforcement in the law. People lose concept of money, and corruption is left unaccounted for, when the numbers are so large as to be incomprehensible.

Now we have had this stimulus, 800 billion, which you seem to be rather uncritical of. I agree, the stimulus was not as bad as the bailout, but that's like saying Ted Bundy was not as bad as Adolf Hitler. They're both unacceptable. For example, I just heard on NPR today that the Congressional Budget Office just released figures that the bailout created 600,000 jobs so far. Now, I know that much of the bailout has not yet been spent, and that it will take time for its effects to accumulate, but let's just do a little equation. 800 billion dollars divided by 600,000 jobs is 1.3 million dollars per job! I don't think these jobs that they're talking about are paying 7 figures. I don't know how the government could have done a worse job of it. Stimulus checks like those from Bush would have been much better. I could probably give 800 billion dollars to Brittney Spears to spend and she would probably create more jobs in the process than Obama did. Much of the bailout is going right back into the hands of the elite.

To put this in perspective, the United Nations Millennium Goals to end poverty, hunger, etc. would have required the US to pay .7 percent, or 0.007 times the GDP each year, which is roughly 100 billion dollars. The UN estimates that global poverty could be eliminated for less than we spent on Obama's stimulus, and that every person could have clean water for a fraction of that. The Stimulus is classist, waistful, and wrong. No Bailouts, No Stimulus, no Bullshit Obama!

You are right Stanley in that both the stimulus and TART are both equally bad. Both parties for that matter are equally bad. You are of course right the jobs created are not 7 figure jobs. The few jobs created where much less and the difference was pocketed.

My purpose in writing this peace was not analysis. The article is a sort of chronology that illustrates well, I think, that neither the left or the right has our interests at heart. The idea that finance is the wheels of economic growth is one I find repugnant and yet it is so readily accepted by so many.I feel sure you to encounter individuals who have no firm grasp on what has been spent and where. Many have not in there own mind really looked at the events of last fall and put them into order. More still are mastakenly under the belief that all this money was a stimulus and do not in their mind no the difference between TARP and stimulus.

I do feel great empathy for all who are out of work but also see a great opportunity to open peoples eyes to the shortcomings of capitalism and our government.

User login

Open Newswire

Bokhara rugs which are also known as Bukhara are the famous "Red" rugs from Central Asia woven by nomadic tribesman. The design is originated 2000 years ago in the city of Bokhara (or Bukhara) which has been home to many people who have helped make it world renowned for its carpets These types of rugs are basically characterized by small, repeating geometric patterns in shades of red and brown. They are usually of very fine quality and New Zealand wool is commonly used. A popular Bokhara design has elephant foot or octagonal repeating motifs which gives a very intricate look and signifies detailed craftsmanship. The fine texture of the New Zealand wool provides a unique sheen to such rugs making it shiny and glossy. Famous Bokhara design rugs usually originate from Eastern Iran, Afghanistan and and Pakistan. These Bokhara rugs are durable and are conducive enough for high traffic areas.
Now www.yakcarpet.in offering traditional Bokhara rugs with thier online portal www.rugsandbeyond.com globally with free shippingoffering finest quality bo

A US House of Representatives Judiciary sub-committee is discussing legislation to give Puerto Rico's public utilities access to US bankruptcy protection. The Subcommittee on Regulatory Reform, Commercial and Antitrust Law is meeting to debate HR 870, a bill introduced by Puerto Rico's Representative in Congress. Puerto Rico has more than $70 billion in public debt, about $20,000 per resident. The island's government attempted to restructure its public utility company's debts but was stopped by a court ruling. As a territory, Puerto Rico cannot access International Monetary Fund (IMF) loans and isn't eligible for the bankruptcy laws that govern US cities and states.

"Puerto Rico is in a debt trap and this bill could be a way out," noted Eric LeCompte, executive director of the religious anti-poverty group, Jubilee USA Network. "In this case, bankruptcy laws can help, just as a global bankruptcy process could help all countries around the globe."

Some financial firms that hold Puerto Rican bonds oppose the bill. Those funds won a recent court decision to block the island's public utility company's $9 billion debt restructuring. Meanwhile, some hedge funds involved in Puerto Rico have been involved in allegedly predatory behavior elsewhere, including Aurelius Management, one of the lead plaintiffs in the Argentine debt dispute.

"It is troubling that there are predatory hedge funds involved in Puerto Rico," said LeCompte, a United Nations expert on debt and finance. "It's important to note that various predatory funds are on both sides of this battle. It shows that these funds will bend laws in either direction for their own interests."

A US House of Representatives Judiciary sub-committee is discussing legislation to give Puerto Rico's public utilities access to US bankruptcy protection. The Subcommittee on Regulatory Reform, Commercial and Antitrust Law is meeting to debate HR 870, a bill introduced by Puerto Rico's Representative in Congress. Puerto Rico has more than $70 billion in public debt, about $20,000 per resident. The island's government attempted to restructure its public utility company's debts but was stopped by a court ruling. As a territory, Puerto Rico cannot access International Monetary Fund (IMF) loans and isn't eligible for the bankruptcy laws that govern US cities and states.

"Puerto Rico is in a debt trap and this bill could be a way out," noted Eric LeCompte, executive director of the religious anti-poverty group, Jubilee USA Network. "In this case, bankruptcy laws can help, just as a global bankruptcy process could help all countries around the globe."

Some financial firms that hold Puerto Rican bonds oppose the bill. Those funds won a recent court decision to block the island's public utility company's $9 billion debt restructuring. Meanwhile, some hedge funds involved in Puerto Rico have been involved in allegedly predatory behavior elsewhere, including Aurelius Management, one of the lead plaintiffs in the Argentine debt dispute.

"It is troubling that there are predatory hedge funds involved in Puerto Rico," said LeCompte, a United Nations expert on debt and finance. "It's important to note that various predatory funds are on both sides of this battle. It shows that these funds will bend laws in either direction for their own interests."

The International Monetary Fund (IMF) is providing $330 million of financing to aid Ebola-impacted countries. The plan includes $170 million of debt relief and grant-like aid for Liberia, Sierra Leone and Guinea. The new plan also expands a debt relief facility previously used to cancel debt after Haiti's 2010 earthquake. The new expanded facility, the Catastrophe Containment Relief Trust (CCR), is now a permanent debt relief facility for the world's poorest countries when they experience shocks such as epidemics or natural disasters.

"This aid is so vital for the countries affected by Ebola," said Eric LeCompte, Executive Director of the religious anti-poverty organization Jubilee USA Network. "Now we have a permanent debt relief vehicle for when the poorest countries face certain crises. Essentially, a global social safety net is now in place to protect the least developed countries when they experience disasters."

$100 million of debt relief will come through the IMF's new Catastrophe Containment Relief Trust. Another $70 million in debt relief will come from other governments who hold debt in the three countries. Concessional loans of $160 million add up to a grand total of $330 million in new financing. The package also includes a new financing mechanism designed to deliver funds to disaster-impacted countries quickly without worsening debt burdens.

"This new fund is an important, permanent tool in the fight against poverty," noted LeCompte, who serves on United Nations expert groups on debt and global finance. "It means resources for countries that need them most at the time they need them most."

President Obama criticized Greek austerity programs in an interview that aired on CNN on Sunday. The United States President said: “You cannot keep on squeezing countries that are in the midst of depression.” Obama called on all sides to compromise and argued, "when you have an economy that is in a free fall there has to be a growth strategy and not simply the effort to squeeze more and more out of a population that is hurting." His comments follow French Finance Minister Michel Sapin's call for a "new contract" between Greece and Europe. The anti-austerity Syriza party won Greece's elections and is seeking to renegotiate Greek debt. Greece is the third-most indebted country in the world.

"Austerity simply doesn't work," said Eric LeCompte, Executive Director of the religious financial reform organization Jubilee USA. "I think President Obama and French leaders understand there needs to be an alternative."

Mr. Sapin met Sunday with Greece's Finance Minister Yanis Varoufakis and said Europe should review austerity policies within the Eurozone. The French minister said Europe should also discuss Greece's debt situation and he and President Obama both called on Greece to make internal reforms. Greece began a series of austerity measures in 2010 as part of its emergency loan from the European Central Bank, International Monetary Fund and European Union. Since 2010, Greek unemployment doubled and the country lost 400,000 jobs in 2012. The Greek economy contracted every fiscal quarter for five years.

The United Nations Economic Commission for Africa (UNECA) released a report calling for debt cancellation for Ebola-impacted countries. The new report, "A Case for External Debt Cancellation for Ebola-Affected Countries," calls on multilateral institutions and governments to cancel Liberia, Sierra Leone and Guinea's debts. The report argues debt relief would provide necessary "breathing space" to address the region's economic challenges. All three countries are ranked in the bottom 15 in the United Nations' Human Development Index.

"West Africa needs debt relief," said Eric LeCompte, Executive Director of the debt relief organization Jubilee USA. "Debt relief will not only fight Ebola, it will also provide a long-term investment in healthcare for the countries."

UNECA first called for debt relief in December. In November, the United States government called for $100 million in debt relief and took its plan to the G20. At the request of the G20, the International Monetary Fund (IMF) is currently considering a $300 million financing package that could include debt relief. In January, Guinea President Alpha Conde called for IMF debt relief. Guinea, where the outbreak began, spent more money on debt than on public health in the year before the epidemic began. All three countries have poverty rates above 50%.

The Syriza party won 149 seats in Greece's Parliament and formed a coalition government with the conservative Independent Greeks who won 13 seats. Syriza campaigned on promises to cease austerity measures and renegotiate some of Greece's debt.

"A third of all Greeks live below the poverty line and this was the reality they brought to the voting booths," said Eric LeCompte, Executive Director of the religious financial reform group, Jubilee USA Network.

Syriza opposes austerity measures that were part of the 2010 $147 billion loan deal during the Greek crisis. Since the deal, unemployment more than doubled and today, youth unemployment is at nearly 50%. The Greek economy contracted for five years in a row and Greece lost 400,000 jobs in 2012. Greece's debt burden is the largest in Europe and trails only Japan among developed nations. Syriza has proposed an international debt conference to renegotiate the length of payment terms and reduce the amount of Greek debt.

"The new Greek government is looking at innovative solutions to deal with debt and austerity policies that trap people in poverty," noted LeCompte who serves on debt expert working groups to the United Nations. "The question at hand is will the International Monetary Fund, European Central Bank and European Union be willing to negotiate."

Jubilee USA Network is an alliance of more than 75 US organizations and 400 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org

The anti-austerity Syriza party leads in polls heading into Greece's national elections Sunday. Syriza says if elected it will renegotiate some of Greece's debt and halt austerity policies. Syriza also calls for a European debt conference similar to the 1953 London Conference that relieved German debt and allowed the country to extend debt payments. The 1953 accord led to such incredible economic growth for post World War II Germany that the period is referred to as the "Wirtschaftswunder" or the "economic miracle."

"It's interesting that Syriza calls for a debt conference," said Eric LeCompte, Executive Director of the debt relief organization Jubilee USA. "It certainly worked for Germany in 1953 and can be a model for heavily indebted countries today."

Greece is the third most heavily indebted country in the world and the most heavily indebted country in Europe. It owes more than $360 billion in total debt. Current polls give Syriza a 4 to 6 percentage point lead over current Prime Minister Antonis Samaras' New Democracy Party.

"The Greek election is now a referendum on austerity and debt," noted LeCompte who sits on United Nations debt expert groups.

The International Monetary Fund (IMF), European Union and European Central Bank negotiated a $147 billion Greek bail out plan in 2010. The loan package included a number of austerity measures that sparked protests in Greece. From 2010 to 2015, unemployment rose from 12% to 26%, the economy contracted five years in a row and wages fell. The country's debt burden also grew. A group of economists released an open letter this week calling for the IMF and European Central Bank to cancel Greek debt and asserted that austerity is "crushing economic activity."

An Argentina bond contract clause expires on December 31 raising the possibility that hold-out hedge funds and Argentina could settle a long running debt dispute. After defaulting in 2001, Argentina restructured its debt with 92% of its bondholders and put in place the Rights Upon Future Offers or RUFO clause. The RUFO clause gives restructured bondholders the right to a higher settlement if Argentina settles at a higher level with another Argentine bondholder. When the clause expires midnight on Wednesday, Argentina and hold-out funds could reach a settlement that would not leave Argentina open to RUFO clause litigation.

"However this dispute is resolved, we're still concerned about the global implications of this case," said Eric LeCompte, Executive Director of the religious development group Jubilee USA. In the spring, Jubilee USA filed a US Supreme Court Amicus Brief to inform the high court of the case's impacts on developing economies. "Even if Argentina settles with the hold-outs, this extreme behavior is legitimized."